Millions of Americans wake up every day to their looming personal debts that they just can’t seem to shake.  The recent housing boom and subsequent bust along with record numbers of job losses have made a subculture of citizens unable to obtain credit because of defaults, foreclosures and a variety of other financial difficulties. Whether financial troubles are due to uncontrollable circumstances such as a major medical expense, or something as irresponsible as putting all your money toward investing in Forex, the creditors do not care.

And of course, no one has felt the pinch more than homeowners who may have been able to hold onto their home through it all but now need to take advantage of lower rates.  Now that lenders are tightening requirements for borrowers, obtaining assistance for refinancing can be next to impossible for those with poor credit.  It seems like a never ending vicious cycle for those trying to get away with a bad credit refinance.

There may be some options out there for individuals with poor credit however they will pay dearly for them.  Its not to say that a bank or other lender will not extend a line of credit or refinance a home for a person with a less than perfect history but there are major drawbacks for these individuals.  Borrowers who have wage garnishments, repossessions, foreclosure or any number of other credit kisses of death on their record look very risky to lenders.  There are sub-prime mortgage companies everywhere that offer refinancing to these people yet interest rates are astronomical and borrowers are usually charged excessive fees to process a loan or refinance.  The rate could very well be worse than the one the borrower already has.  In a nutshell, there are few options for those with poor credit to refinance a loan.  Reputable lenders offering low rates will not deal with borrowers like this and companies that are willing to do not have the borrower’s best interest at heart.

All is not lost for those with bad credit.  It has been said that a bad credit history is better than no history at all and a report with a few late payments or a garnishment on it can be turned around in a shorter period of time than most people may assume.  If you have the time and the finances to work on your credit score, it usually only takes 6 to 12 months to rebuild a bad reputation.  Making on time payments to the accounts you already have open for this time period will greatly improve your score.  Even though a bankruptcy takes seven years in most cases to fall off of your report, many lenders may look at it favorably because a person cannot file for bankruptcy again for the same time period.

Working on your credit score beginning now is the best bet to be able to obtain credit in the short term future.  Using a company that will charge outrageous fees and high interest rates because of your history is simply not worth the hassle.  Paying on the accounts you already have open for a relatively short period of time will greatly improve a lender’s view of you on paper.  Finding ways of paying off accounts is also a good way to improve your score and bad marks on credit reports such as bankruptcies aren’t always the worse thing in the eyes of a bank.